In a move likely to benefit around 47 lakh central government employees and give a boost to the housing sector, the Centre on Thursday revised House Building Advance (HBA) rules, that will allow them to borrow more than triple the amount from the government. The earlier Rs 7.50 lakh could has been increased to a ceiling of Rs 25 lakh now.
In a move likely to benefit around 47 lakh central government employees and give a boost to the housing sector, the Centre on Thursday revised House Building Advance (HBA) rules, that will allow them to borrow more than triple the amount from the government. The earlier Rs 7.50 lakh could has been increased to a ceiling of Rs 25 lakh now.
The move is on the lines of the accepted recommendations of the 7th Pay Commission.
Additionally, the government has also increased the amount that a central government employee can borrow for expansion of their homes from Rs 1.80 lakh earlier to a maximum of Rs 10 lakh or 34 months of basic pay. As per the revised rules, the cost ceiling limit of the house which an employee can construct or purchase has been increased to Rs 1 crore, with a provision of upward revision of 25% in deserving cases, against Rs 30 lakh earlier.
"People can now migrate from home loans taken from financial institutions and banks to HBA, if they so desire. This attractive package is expected to incentivise the government employee to buy house/ flat by taking the revised HBA along with other bank loans, if required. This will give a fillip to the housing infrastructure sector," an official release from the government stated.
It added that the government has also fixed the rate of interest on HBA to 8.5%, replacing the earlier four slabs of interest rates ranging from 6% to 9.50% for loans ranging from Rs 50,000 to Rs 7.5 lakh, which will now be reviewed every three years.
The government has also withdrawn the proposal to for adding a higher rate of interest at 2.5% above the prescribed rate during sanction of HBA.The house constructed or purchased with the help of HBA can be insured with the private insurance companies which are approved by the Insurance Regulatory Development Authority.
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